The Sheep, Deer and Cattle Report: Brexit and the Shanghai Mayling deal will both be significant influences for the future of meat and wool

LAMB

More falls in this week’s schedules as export prices drop again, disappointing winter finishers after looking promising a few weeks ago.

Volatile currencies appear to be the main cause of these falls, as processors report steady demand, but lowering returns when the exchange rates of our main trading partners is factored in.

Stocks are diminishing, especially in the important Chinese market, and with local numbers low, demand is building for processors to meet their regular chilled commitments.

The local trade schedules are lifting however, and some finishers maybe able to sell here to keep returns higher.

Adding to the uncertainty is the indecision over the SFF/Shanghai Mayling deal, with one report stating it had stalled waiting for information to be sent to the OIO, and on Friday it was revealed the two parties were working on agreeing on an extension.

Despite a strong denial from Silver Fern Farms, the pessimists that see no future in this deal believe that the Chinese are going cold, which is ironic as their argument against it is that it favours the outside partner at the expense of the producer.

Looking from the outside this writer is a strong supporter of this partnership and fail to see how "carrying on as before" will bring any change to an industry lacking in profitability in both the processing/exporting and producer areas.

The Companies Office confirms "there is no evidence that Silver Fern Farms  acted in anything other than in good faith and in the best interests of the Company" in respect to the Shanghai Mayling deal and quashes the NZ First complaints in this regard.

Saleyard prices for prime and store lambs are steady, but while values compared to last year are $20 a head higher for unfinished lambs, prime lamb values are similar.

WOOL

The North Island wool auction saw a big offering, weak demand, and an unhelpful currency, lowering prices further in a disappointing end to the season.

All wool indicators are now back to yearly lows, and South Island vendors will be nervous for next week’s big sale especially after the European/ British situation has created so much uncertainty.

BEEF
 

Beef schedules eased this week on the back of the currency but processors report NZ and Australian kill numbers are falling rapidly.

Local trade prices have held firm and prime steers sold at Canterbury saleyards are limited by the quality of animals offered.

Early sales of weaned Fresian bull calves have hit the market hot in the Waikato at prices well over $5/kg, and purchasers will be hoping the beef boom holds for a couple of years yet.

Wintering conditions are excellent and those using fodder beet for growing animals are achieving above average winter growth rates.

Silver Fern Farms has again fine tuned it's processing operation with the shifting of the bobby calf kill to a central site in Pareora South Canterbury, and at the expense of their facilities at Fairton.

DEER

Confusing signals from venison processors this week, with one company lifting by 20c/kg, and one dropping the schedule by a similar amount.

The Brexit will cause some confusion in the important British and European product destinations, and the currency volatility is sure to influence farm gate returns.

Seven years of stability have been enjoyed by velvet producers but industry officials warn that a currency devaluation last year helped the cause considerably, and significant price risks still remain in the future.

Over production, over reliance on a few commodity traders, and the risk of non-tariff trade barriers were areas seen as  challenges for this product to maintain it's present momentum.